Chinese automakers' shares take hits after Beijing said it will open its car market
- Chinese automakers, especially those that work with foreign firms to manufacture vehicles in China, traded in the red on Wednesday.
- The Hong Kong-listed shares of BAIC Motor, which has joint ventures with Daimler and Hyundai, is among Chinese automakers suffering the biggest losers.
- The selloff came after Beijing on Tuesday said it would gradually remove foreign ownership limits car makers by 2022.
Chinese automakers, especially those in ventures with foreign firms to manufacture vehicles in China, traded in the red on Wednesday following Beijing's announcement that it would open its car market.
The Hong Kong-listed shares of BAIC Motor, which has joint ventures with Daimler and Hyundai, was among automakers suffering the biggest losses, down 15.68 percent on Wednesday morning local time.
, which works with Toyota, Honda and Mitsubishi, was down 8.17 percent in Hong Kong and 4.65 percent in Shanghai.
The other Chinese auto stocks that were battered on Wednesday morning:
- Dongfeng Auto, which partners with Kia and Honda, was down 6.27 percent in Hong Kong and 0.87 in Shanghai.
- Brilliance Auto, with a JV with BMW, fell 8.71 percent in Hong Kong.
- SAIC Group, which manufacturers Volkswagen and Skoda cars, declined 1.94 percent in Shanghai.
The broader markets in Hong Kong and Shanghai were mostly flat, with the up by around 0.19 percent and Shanghai Composite down 0.28 percent.
The declines in Chinese auto stocks came after Beijing on Tuesday said it would gradually remove foreign ownership limits on automotive firms by 2022.
Currently, foreign car makers are allowed to own a maximum of 50 percent of any local venture — a restriction that has led to complaints by the likes of Tesla's Elon Musk.
If the limit is removed, foreign automakers may seek greater or full control of their ventures in China — a move that would hurt their local partners, analysts at Daiwa Capital Markets wrote in a note.
"We expect some near-term pressure on Brilliance, BAIC, (Dongfeng) and (Guangzhou Automobile), and recommend sticking with local brands like Geely," the analysts added.
— CNBC's Cheang Ming and Reuters contributed to this report.